Electronic Cash
The Electronic Cash payment system is a debit card system of the German Banking Industry Committee. It represents the interests of the leading banking associations and has been operating the electronic cash system since 1990. Payments are made using an electronic cash card (EC card) issued by one of the affiliated banks.
Electronic cash: Payment processing
The cardholder can use an electronic cash card to make cashless payments at electronic cash terminals by entering a PIN number. Electronic cash payment is a particularly secure method of payment for merchants and buyers. If the payment is processed properly, the merchant can rule out payment defaults or chargebacks due to insufficient funds in the buyer’s electronic cash account. The electronic cash payment procedure is suitable for both payment stations and unattended terminals such as ticket vending machines. In Germany, there are well over 90 million issued electronic cash cards that can be used at the more than 600,000 existing terminals.
Electronic cash payment processing: licensing requirements
The operation of a terminal for electronic cash payments is subject to approval. This is granted by the German Banking Industry, provided that the operator meets the necessary technical requirements. These prerequisites for the operation of an electronic cash terminal are listed conclusively by the German banking industry in the technical annex to the agreement on approval as a network operator in the electronic cash system.
Security precautions for the electronic cash procedure
All electronic cash cards have a magnetic stripe on which static information is stored. Since 2000, more and more banks have started to equip their electronic cash cards with an additional chip. This chip functions like a small computer. It’s clear advantage over the magnetic stripe, however, is that its contents cannot be read out completely or even copied. The magnetic stripes on electronic cash cards, on the other hand, can be copied relatively easily. Nevertheless, magnetic stripes remain on the EC cards to ensure compatibility with the Maestro card, for example, which is usually included. However, the chip has been mandatory for the electronic cash procedure since 2011.
